Sydney John Chapman

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Sir Sydney John Chapman (1871-1951) was a British economist and civil servant. He was knighted in 1920, served as Permanent Secretary to the UK Board of Trade from 1920 to 1927 and was Chief Economic Advisor to the U.K. government from 1927 to 1932. His publications include: The Lancashire Cotton Industry (1904), The Cotton Industry and Trade (1905), and Outlines of Political Economy (1911).

[edit] Theory on working time

In 1909, Chapman presented his theory on working time, fatigue and productivity at the conference of the Section on Economic Science and Statistics of the British Association for the Advancement of Science. The theory was subsequently published as Hours of Labour in the September 1909 issue of the Economic Journal. Chapman's analysis came to be regarded as the classical statement of the theory of 'hours' in a free market. (John Hicks) Arthur C. Pigou restated Chapman's argument in his influential textbook, Economics of Welfare. Alfred Marshall referred to Chapman's analysis as authoritative, as did Lionel Robbins. Concluding a reference to Chapman and Pigou on the hours of labour, Hicks declared, "There is very little that needs to be added to the conclusions of these authorities."

The fact that both the intensity and the duration of work vary makes it hard for economists to calculate the returns to various factors of production. So, in the 1930s, Hicks introduced a simplifying assumption that the given hours of work are optimal. He cautioned that after performing the calculations, it would be necessary for the analyst to "think back" from the simplification to more realistic assumptions. Instead, however, economists have come to regard the simplification as an adequate description of reality, although it is counter to what the actual theory suggests is the case.

[edit] Recent reference to Chapman's theory

In 2001, the government of the Australian state of Queensland highlighted Chapman's theory of the hours of labour in their submission to the Australian Industrial Relations Commission on the "Reasonable Hours" test case. They presented the following summary of Chapman's argument:

The main points of this argument can be summarised as follows:

a mass of evidence indicating that reductions in hours of work had not led to proportionate declines in output;

modern industry fatigue was less physical in nature and more a combination of psychological and physiological as a result of specialisation and increased need for mental concentration;

the reduction of hours allowed better-rested workers to produce as much or more in the shorter hours;

the total value of the output would initially rise as the working day increased but eventually the total output as well as the output per hour would decline as the working day became so long that it prevented adequate recovery from fatigue for workers;

this is the case because, beyond a certain point, each additional hour of work would be contributing to the output of the current day's total output but at the expense of the following day's output capacity; and

the intensity of the work involved would dictate the point at which total output begins to fall and thus the length of the 'optimal' working day.

The second half of this argument explores whether the free market can arrive at the 'optimal' length of day, and can be summarised as follows:

the maintenance of a long-term optimum by employers would require short-term restraint;

each individual employer could never be certain of reaping the benefit of their restraint as another firm could potentially entice the employer's well-rested workers away with a wage premium;

therefore the optimal output work time is a form of investment without equity;

simultaneously, Chapman (1909) assumed that workers would choose a longer working day than was prudent (although not as long as the working day preferred by employers), primarily because of a general short-sightedness that would mean workers would consider their immediate earning capacity more than their longterm earning capacity1; and

the outcome in a free market situation would therefore be one where employers and employees acting in self-interest would each tend to select a working day that was longer than the 'optimal' hours.

Chapman (1909) considered three elements in gauging the optimal day for the worker;

the wage,

the marginal value of leisure and

the disutility of work.